Dallas Fed Survey: Texas Service Sector Activity Expands, but at a Slower Pace; Retail Sales Increase in December

DALLAS—Texas service sector activity increased in December, according to business executives responding to the Texas Service Sector Outlook Survey (TSSOS).

The survey is conducted monthly by the Dallas Fed to obtain a timely assessment of activity in the state’s service sector, which represents 59 percent of the state economy and employs close to 7 million workers.

The TSSOS revenue index—a key measure of state service sector conditions—fell from 14 to 9, which is indicative of slower revenue growth.

Labor market indicators reflected stronger hiring and slightly longer workweeks. The employment index moved up from 5.5 to 8.8, its best reading in nine months.

Perceptions of general business conditions remained positive in December. Indexes of future service sector activity generally improved from last month, and expectations regarding future business conditions were more optimistic.

TSSOS also includes a component called the Texas Retail Outlook Survey, which uses information from respondents in the retail and wholesale sectors only.

Retail sales increased in December, according to business executives responding to the retail portion of the survey. The volatile sales index edged down from 12.8 to 11, marking five consecutive months of sales increases. Inventories rose.

Indexes of future retail sector activity rose further into positive territory in December, while the index of future company outlook improved sharply.